INSIGHT-As sequencing moves into clinical use, insurers balk

Her son, Christian, was born in 2010 with multiple,
mysterious syndromes that leave him unable to speak, chew, or
walk on his own.

Initial genetic tests failed to provide a diagnosis. Aimee's
hopes are now pinned on a new test called exome sequencing that
searches all the protein-making genes for glitches that could
explain Christian's condition.

Once strictly the domain of research labs, gene-sequencing
tests increasingly are being used to help understand the genetic
causes of rare disease, putting insurance companies in the
position of deciding whether to pay the $5,000 to $17,000 for
the tests.

As use of the new technology has grown, a number of
insurers, including Blue Cross Blue Shield, have reacted by
putting the brakes on reimbursement, according to interviews
with researchers, diagnostic experts and insurance executives.
Insurers are demanding proof that the results will lead to
meaningful treatments among the estimated 2 million Americans
with a serious, undiagnosed disease, still an unlikely prospect
in the majority of cases.

Genetics experts say that sequencing more than doubles the
chances that families get a diagnosis, and saves spending on
multiple tests of single genes. Even if no treatment is found,
the tests can also end hugely expensive medical odysseys as
parents frantically search for the cause of their child's
furtive illness.

Until the reimbursement issue is resolved, some smaller
diagnostics players will likely stay on the sidelines, leaving
the field to early adopters of the technology such as Ambry
Genetics and Bio-Reference Laboratories' GeneDx. And
families short on resources like the Robesons will be left
scrambling for funding.

UNRAVELING RARE DISEASE

Howard Jacob was the first to use gene-sequencing tools to
unravel the mystery of a rare disease in 2009, leading to a bone
marrow transplant that saved a little boy named Nic Volker.

Five years later, Jacob's molecular genetics lab at the
Medical College of Wisconsin has done more than three dozen
whole genome sequences, a test that reads the more than 3
billion letters that make up the human genetic code. They have
sequenced 400 whole exomes, tests that look only at the
protein-making segments of DNA known as exons, which represent 2
percent of the genome but account for 85 percent of
disease-causing mutations.

Baylor College of Medicine in Houston, Texas, has handled
3,500 exome-sequencing cases since it started offering the test
in 2011. A study of its first 250 cases showed whole exome
sequencing identified the disease-causing gene in 25 percent of
cases. Since the findings were published last October, the rate
has increased to 28 percent as the list of known mutations has
grown, said Dr. Christine Eng, who directs Baylor's Whole Genome
Sequencing Laboratory.

Eng said insurance companies initially paid for most of the
tests, but as volume has increased, more claims are getting
denied. "There are some companies that are saying out and out,
we won't cover this test."

Dr. Allen Bale, director of the DNA Diagnostic Lab at Yale
School of Medicine in Connecticut, has seen a 500 percent
increase in orders for exome sequencing since 2011. The lab does
about 750 whole exome tests a year, and there, too,
reimbursement is becoming an issue.

Bale said Medicare does not cover the tests. Other insurers
pay enough so the lab can break even.

"There's a lot of testing we're doing that's getting denied.
We appeal it," he said. "A lot of time that works, but it's case
by case."

LACK OF EVIDENCE

Although gene sequencing is still far from mainstream, its
rapidly dropping cost - which has fallen from $3 billion for the
first gene map in 2003 to as little as $1,000 this year - has
made the tests increasingly attractive. In cases like
Christian's, doctors say it offers a more comprehensive way to
diagnose unexplained syndromes, replacing the guessing game in
which tests are ordered based on what they think the problem
might be.

Insurers are not yet convinced.

Dr. Julie Kessel, who directs coverage policy for
Cigna, said sequencing requests were scarcely noticed five
years ago. Now, "they're very, very much on the radar." Cigna
generally does not cover whole genome or whole exome sequencing
unless there is a clear clinical reason.

Last August, one of the industry's biggest players, Blue
Cross Blue Shield, issued a report saying exome sequencing might
pinpoint the genetic cause of disease in up to half of patients,
but only a fraction of those will be able to use that as
guidance because treatments don't exist yet. Since then, Blues
plans in Louisiana, North Carolina and Pennsylvania have deemed
exome sequencing "investigational," meaning not eligible for
coverage.

Christian's own insurance company, Pennsylvania Medicaid
provider UPMC for You, "didn't budge at all," Aimee Robeson
said. The family hired an attorney and appealed, but lost. The
company wanted proof the test would offer a benefit. Christian's
geneticist wrote a letter listing reasons it might, but the
judge wasn't swayed.

Insurers say their objections stem from a lack of evidence
that the tests can improve patient care.

There are some celebrated examples that it can, such as the
Volker case or Noah and Alexis Beery of California, whose
genetic defect left them with health problems similar to
cerebral palsy. Genome sequencing led to highly effective
treatments to replace the missing neurotransmitters that were
causing their symptoms.

In most cases, however, finding a treatment "is vanishingly
rare because we're only just making these discoveries," said Dr.
Teri Manolio of the National Human Genome Research Institute, a
part of the National Institutes of Health.

At Aetna Inc, Dr. James Cross, vice president of
national medical policy and operations, said sequencing has
gotten ahead of the evidence.

Traditionally the company has made coverage decisions based
on the individual test and whether it affects patient outcomes,
he said. "With sequencing, you've got a lot of information that
we don't have that kind of evidence around."

For Ambry Genetics, the first commercial lab to offer whole
exome sequencing, insurance coverage is "all over the map" for
the company's $5,800 test, said billing director Marsha
McDonagh. She works with Blue Cross, Cigna, Aetna,
UnitedHealthcare and several Medicaid plans, among
others. "The ones least receptive right now are the Blues," she
said.

Consultant Stephane Budel of DeciBio believes the
reimbursement issue is stifling competition among diagnostics
providers. Industry players range from those just ramping up,
such as MolecularHealth and Selah Genomics, to midsize companies
such as Ambry and GeneDx and giants such as Illumina
and Thermo Fisher Scientific's Life Technologies.

"There's definitely a number of smaller players that are
waiting for this to be sorted out," said Budel. He believes
insurers' concerns will fall away as sequencing costs continue
to fall in the next few years. "There is very little doubt it is
going to become standard of care."

'MONUMENTAL RELIEF'

Even without treatments, a diagnosis gives parents the
ability to make better-informed family-planning decisions and
puts a stop to repeated testing that can cost tens of thousands
of dollars.

"There's a monumental relief with diagnosis. It changes
everything," said Dr. Richard Gibbs, director of the Baylor
Human Genome Sequencing Center, who sequenced the Beery twins.

Andrea Smith of Winthrop Harbor, Illinois, realized her son
Ethan had a serious problem when a virus turned his urine "the
color of Coca-Cola." With her next boy, Chase, a virus caused
kidney failure; the same happened with her youngest child,
Norah. A fourth had no symptoms.

Doctors suspected a genetic form of atypical
hymolytic-uremic syndrome, a kidney disorder. Their case was so
compelling that doctors at Children's Hospital of Wisconsin
offered to sequence Norah's genome, funded by a research grant.

They learned that three of her children inherited the
disorder, and the fourth is a carrier. But testing also showed
the defect could be corrected with a kidney transplant. Smith
says it's too early to consider that option for her children,
but she's glad to know she has one.

Aimee Robeson may soon get an answer as well. Members of her
church are paying the $7,000 for Christian's test.

"I'm relieved it's getting done," Aimee said. "I want to
make sure if there is anything that I could do for my son, that
I did it."
(Reporting by Julie Steenhuysen; Editing by Michele Gershberg
and Prudence Crowther)

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